Презентация Technical Analysis онлайн

Содержание слайда: Technical Analysis By Dias Kulzhanov

Содержание слайда: 1.GENERAL PRINCIPLES AND ASSUMPTIONS Technical analysis is a form of security analysis that uses price and volume market data, often graphically displayed. Technical analysis can be used for any freely traded security in the global market and is used on a wide range of financial instruments, such as equities, bonds, commodity futures, and currency futures. Technical analysis is the study of market trends or patterns and relies on recognition of patterns that have worked in the past in an attempt to predict future security prices. Technicians believe that market trends and patterns repeat themselves and are somewhat predictable because human behaviour tends to repeat itself and is somewhat predictable. The usefulness of technical analysis is diminished by any constraints on the security being freely traded, by large outside manipulation of the market, and in illiquid markets.

Содержание слайда: Another tenet of technical analysis is that the market brings together the collective wisdom of multiple participants, weights it according to the size of the trades they make, and allows analysts to understand this collective sentiment. Another tenet of technical analysis is that the market brings together the collective wisdom of multiple participants, weights it according to the size of the trades they make, and allows analysts to understand this collective sentiment. Technical analysis relies on knowledgeable market participants putting this knowledge to work in the market and thereby influencing prices and volume. Technical analysis and fundamental analysis are equally useful and valid, but they approach the market in different ways. Technical analysis focuses solely on analysing markets and the trading of financial instruments, whereas fundamental analysis is a much wider ranging field encompassing financial and economic analysis as well as analysis of societal and political trends. Technical analysis relies primarily on information gathered from market participants that is expressed through the interaction of price and volume. Fundamental analysis relies on information that is external to the market in an attempt to evaluate a security’s value relative to its current price.

Содержание слайда: 2.TECHNICAL ANALYSIS TOOLS The primary tools used in technical analysis are charts and indicators. Charts provide information about past price behavior and provide a basis for inferences about likely future price behavior. Various types of charts can be useful in studying the markets: line charts, bar charts, candlestick charts, and point and figure charts.

Содержание слайда: 2.1.1 Line Chart Line charts are familiar to all types of analysts and are a simple graphic display of price trends over time. Usually, the chart is a plot of data points, such as share price, with a line connecting these points. Line charts are typically drawn with closing prices as the data points.

Содержание слайда: 2.1.2 Bar Chart A bar chart, in contrast, has four bits of data in each entry—the high and low price encountered during the time interval plus the opening and closing prices.

Содержание слайда: 2.1.3 Candlestick Chart Candlestick charts trace their roots to Japan, where technical analysis has been in use for centuries. Like a bar chart, a candlestick chart also provides four prices per data point entry: the opening and closing prices and the high and low prices during the period.

Содержание слайда: 2.1.4 Point and Figure Chart Point and figure charts were widely used in the United States in the early 1900s and were favored because they were easy to create and update manually in the era before computers. As with any technical analysis tool, these charts can be used with equities, fixed-income securities, commodities, or foreign exchange.

Содержание слайда: Volume, Time Intervals Volume is used to assess the strength or conviction of buyers and sellers in determining a security’s price. Some technicians consider volume information to be crucial. If volume increases during a time frame in which price is also increasing, that combination is considered positive and the two indicators are said to “confirm” each other. The signal would be interpreted to mean that over time, more and more investors are buying the financial instrument and they are doing so at higher and higher prices. Most of the chart examples in this reading are daily price charts in that they show the price and volume on a daily basis. For short-term trading, the analyst can create charts with one minute or shorter intervals. For long-term investing, the analyst can use weekly, monthly, or even annual intervals.

Содержание слайда: Relative Strength Analysis Relative strength analysis is widely used to compare the performance of a particular asset, such as a common stock, with that of some benchmark—such as, in the case of common stocks, the FTSE 100, the Nikkei 225, or the S&P 500 Index—or the performance of another security

Содержание слайда: TREND The concept of a trend is perhaps the most important aspect of technical analysis. Trend analysis is based on the observation that market participants tend to act in herds and that trends tend to stay in place for some time. A security can be considered to be in an upward trend, a downward trend, a sideways trend, or no apparent trend. An uptrend for a security is when the price goes to higher highs and higher lows. A downtrend is when a security makes lower lows and lower highs. Two concepts related to trend are support and resistance. Support is defined as a low price range in which buying activity is sufficient to stop the decline in price. It is the opposite of resistance, which is a price range in which selling is sufficient to stop the rise in price. A key tenet of support and resistance as a part of technical analysis is the change in polarity principle, which states that once a support level is breached, it becomes a resistance level.

Содержание слайда: CHART PATTERNS Chart patterns are formations that appear in price charts that create some type of recognizable shape. Common patterns appear repeatedly and often lead to similar subsequent price movements. Chart patterns can be divided into two categories: reversal patterns and continuation patterns. Reversal patterns signal the end of a trend. Common reversal patterns are the head and shoulders, the inverse head and shoulders, double tops and bottoms, and triple tops and bottoms.

Содержание слайда: Head and shoulders pattern Volume is an important characteristic in interpreting this pattern. Because head and shoulders indicates a trend reversal, a clear trend must exist prior to the formation of the pattern in order for the pattern to have predictive validity. For a head and shoulders pattern, the prior trend must be an uptrend. The pattern consists of three segments:

Содержание слайда: Inverse Head and Shoulders The head and shoulders pattern can also form upside down and act as a reversal pattern for a preceding downtrend. The three parts of the inverse head and shoulders are as follows:

Содержание слайда: Setting Price Targets with Head and Shoulders Patterns Once the neckline is breached, the security is expected to decline by the same amount as the change in price from the neckline to the top of the head. The price target for the head and shoulders pattern is calculated as follows: Price target = Neckline – (Head – Neckline) Calculating price targets for inverse head and shoulders patterns is similar to the process for head and shoulders patterns, but in this case, because the pattern predicts the end of a downtrend, the technician calculates how high the price is expected to rise once it breaches the neckline. For an inverse head and shoulders pattern, the formula is similar to a head and shoulders pattern: Price target = Neckline + (Neckline – Head)

Содержание слайда: Double Tops A double top is when an uptrend reverses twice at roughly the same high price level. Typically, volume is lower on the second high than on the first high, signalling a diminishing of demand. The longer the time is between the two tops and the deeper the sell-off is after the first top, the more significant the pattern is considered to be. Price targets can be calculated from this pattern in a manner similar to the calculation for the head and shoulders pattern. For a double top, price is expected to decline below the low of the valley between the two tops by at least the distance from the valley low to the high of the double tops Price target = Valley + (High of the double tops – Valley)

Содержание слайда: Double bottoms Double bottoms are formed when the price reaches a low, rebounds, and then sells off back to the first low level.

Содержание слайда: The reason of Double Tops and Bottoms patterns For an uptrend, a double top implies that at some price point, enough traders are willing to either sell positions (or enter new short positions) that their activities overwhelm and reverse the uptrend created by demand for the shares. A reasonable conclusion is that this price level has been fundamentally derived and that it represents the intrinsic value of the security that is the consensus of investors. With double bottoms, if a security ceases to decline at the same price point on two separate occasions, the analyst can conclude that the market consensus is that at that price point, the security is now cheap enough that it is an attractive investment.

Содержание слайда: Triple Tops and Bottoms Triple tops consist of three peaks at roughly the same price level, and triple bottoms consist of three troughs at roughly the same price level. Nevertheless, the greater the number of times the price reverses at the same level, and the greater the time interval over which this pattern occurs, the greater the significance of the pattern.

Содержание слайда: Continuation Patterns Continuation patterns indicate that a market trend in place prior to the pattern formation will continue once the pattern is completed. Common continuation patterns are triangles, rectangles, flags, and pennants. Triangle patterns are a type of continuation pattern. They come in three forms, symmetrical triangles, ascending triangles, and descending triangles. A triangle pattern forms as the range between high and low prices narrows, visually forming a triangle.

Содержание слайда: Ascending triangles An ascending triangle typically forms in an uptrend. The horizontal line represents sellers taking profits at around the same price point, presumably because they believe that this price represents the fundamental, intrinsic value of the security.

Содержание слайда: Descending triangles Descending triangle will form in a downtrend. At some point in the sell-offs, buyers appear with enough demand to halt sell-offs each time they occur, at around the same price.

Содержание слайда: Symmetrical triangles In a symmetrical triangle, the trendline formed by the highs angles down and the trendline formed by the lows angles up, both at roughly the same angle, forming a symmetrical pattern.

Содержание слайда: Rectangle Pattern The horizontal resistance line that forms the top of the rectangle shows that investors are repeatedly selling shares at a specific price level, bringing rallies to an end. The horizontal support line forming the bottom of the rectangle indicates that traders are repeatedly making large enough purchases at the same price level to reverse declines.

Содержание слайда: Flags and Pennants Flags and pennants are considered minor continuation patterns because they form over short periods of time—on a daily price chart, typically over a week.

Содержание слайда: 2.2 Technical Indicators The technical analyst uses a variety of technical indicators to supplement the information gleaned from charts. A technical indicator is any measure based on price, market sentiment, or funds flow that can be used to predict changes in price. These indicators often have a supply-and-demand underpinning; that is, they measure how potential changes in supply and demand might affect a security’s price. Price-based indicators somehow incorporate information contained in the current and past history of market prices. Indicators of this type range from simple (e.g., a moving average) to complex (e.g., a stochastic oscillator).

Содержание слайда: 2.2.1.1 Moving Average A moving average is the average of the closing price of a security over a specified number of periods. Moving averages smooth out short-term price fluctuations, giving the technician a clearer image of market trend. Moving averages can be used in conjunction with a price trend or in conjunction with one another. Moving averages are also used to determine support and resistance.

Содержание слайда: 2.2.1.2 Bollinger Bands Bollinger Bands consist of a moving average plus a higher line representing the moving average plus a set number of standard deviations from average price and a lower line that is a moving average minus the same number of standard deviations.

Содержание слайда: 2.2.2 Momentum Oscillators One of the key challenges in using indicators overlaid on a price chart is the difficulty of discerning changes in market sentiment that are out of the ordinary. Momentum oscillators are intended to alleviate this problem. They are constructed from price data, but they are calculated so that they either oscillate between a high and low (typically 0 and 100) or oscillate around a number (such as 0 or 100). Technicians also look for convergence or divergence between oscillators and price. Convergence is when the oscillator moves in the same manner as the security being analysed, and divergence is when the oscillator moves differently from the security. Momentum oscillators should be used in conjunction with an understanding of the existing market (price) trend. Oscillators alert a trader to overbought or oversold conditions. In an overbought condition, market sentiment is unsustainably bullish. In an oversold condition, market sentiment is unsustainably bearish. In other words, the oscillator range must be considered separately for every security.

Содержание слайда: 2.2.2.1 Momentum or Rate of Change Oscillator

Содержание слайда: 2.2.2.2Relative Strength Index

Содержание слайда: 2.2.2.3 Stochastic Oscillator

Содержание слайда: 2.2.2.4 Moving-Average Convergence/Divergence Oscillator The MACD is the difference between a short-term and a long-term moving average of the security’s price. The MACD is constructed by calculating two lines, the MACD line and the signal line: MACD line: difference between two exponentially smoothed moving averages, generally 12 and 26 days. Signal line: exponentially smoothed average of MACD line, generally 9 days.

Содержание слайда: 2.2.3 Sentiment Indicators Sentiment indicators attempt to gauge investor activity for signs of increasing bullishness or bearishness. Sentiment indicators come in two forms: investor polls and calculated statistical indices. A wide range of services conduct periodic polls of either individual investors or investment professionals to gauge their sentiment about the equity market. The most common of the polls are the Investors Intelligence Advisors Sentiment reports, Market Vane Bullish Consensus, Consensus Bullish Sentiment Index, and Daily Sentiment Index, all of which poll investment professionals, and reports of the

Содержание слайда: 2.2.3.2 Calculated Statistical Indices The other category of sentiment indicators are indicators that are calculated from market data, such as security prices. The two most commonly used are derived from the options market; they are the put/call ratio and the volatility index. Additionally, many analysts look at margin debt and short interest. The put/call ratio is the volume of put options traded divided by the volume of call options traded for a particular financial instrument. Investors who buy put options on a security are presumably bearish, and investors who buy call options are presumably bullish. The volume The CBOE Volatility Index (VIX) is a measure of near-term market volatility calculated by the Chicago Board Options Exchange. Since 2003, it has been calculated from option prices on the stocks in the S&P 500. The VIX rises when market participants become fearful of an impending market decline.

Содержание слайда: Margin debt and Short interest Margin debt is also often used as an indication of sentiment. As a group, investors have a history of buying near market tops and selling at the bottom. When the market is rising and indices reach new highs, investors are motivated to buy more equities in the hope of participating in the market rally. A margin account permits an investor to borrow part of the investment cost from the brokerage firm. This debt magnifies the gains or losses resulting from the investment. Investor psychology plays an important role in the intuition behind margin debt as an indicator. When stock margin debt is increasing, investors are aggressively buying and stock prices will move higher because of increased demand Short interest is another commonly used sentiment indicator. Investors sell shares short when they believe the share prices will decline. Short interest ratio = Short interest/Average daily trading volume Some people believe that if a large number of shares are sold short and the short interest ratio is high, the market should expect a falling price for the shares because of so much negative sentiment about them. A counter-argument is that, although the short sellers are bearish on the security, the effect of their short sales has already been felt in the security price.

Содержание слайда: 2.2.4 Flow-of-Funds Indicators Flow-of-funds indicators help technicians gauge potential changes in supply and demand for securities. Some commonly used indicators are the ARMS Index (also called the TRIN), margin debt (also a sentiment indicator), mutual fund cash positions, new equity issuance, and secondary equity offerings.

Содержание слайда: Margin debt is also widely used as a flow-of-funds indicator because margin loans may increase the purchases of stocks and declining margin balances may force the selling of stocks. Mutual funds hold a substantial proportion of all investable assets. Some analysts use the percentage of mutual fund assets held in cash as a predictor of market direction. It is called the “mutual fund cash position indicator”. During a bull market, the manager wants to buy shares as quickly as possible to avoid having a cash “drag” hurt the fund’s performance. If prices are trending lower, however, the manager may hold funds in cash to improve the fund’s performance. An analyst’s initial intuition might be that when cash is relatively low, fund managers are bullish and anticipate rising prices, but when fund managers are bearish, they conserve cash to wait for lower prices.

Содержание слайда: Putting more shares on the market increases the aggregate supply of shares available for investors to purchase. The investment community has a finite quantity of cash to spend, so an increase in IPOs may be viewed as a bearish factor. Technicians also monitor secondary offerings to gauge potential changes in the supply of equities. Although secondary offerings do not increase the supply of shares, because existing shares are sold by insiders to the general public, they do increase the supply available for trading or the float. So, from a market perspective, secondary offerings of shares have the potential to change the supply-and-demand equation as much as IPOs do.

Содержание слайда: INTERMARKET ANALYSIS Intermarket analysis is based on the principle that all markets are interrelated and influence each other. This approach involves the use of relative strength analysis for different groups of securities (e.g., stocks versus bonds, sectors in an economy, and securities from different countries) to make allocation decisions. Stock prices are affected by bond prices. High bond prices are a positive for stock prices since this means low interest rates. Lower interest rates benefit companies with lower borrowing costs and lead to higher equity valuations in the calculation of intrinsic value using discounted cash flow analysis in fundamental analysis. Thus rising bond prices are a positive for stock prices, and declining bond prices are a bearish indicator. Bond prices impact commodity prices. Bond prices move inversely to interest rates. Interest rates move in proportion to expectations to future prices of commodities or inflation. So declining bond prices are a signal of possible rising commodity prices. Currencies impact commodity prices. Most commodity trading is denominated in US dollars and so prices are commonly quoted in US dollars. As a result, a strong dollar results in lower commodity prices and vice versa.

Содержание слайда: In intermarket analysis, technicians often look for inflection points in one market as a warning sign to start looking for a change in trend in a related market. To identify these intermarket relationships, a commonly used tool is relative strength analysis, which charts the price of one security divided by the price of another